Effect of bundled payments for colectomy on hospital finances

Editor's Note

In this analysis of Medicare patients undergoing colectomy at Johns Hopkins, Baltimore, payments under the Bundled Payments for Care Improvement Initiative were lower than traditional fee-for-service payments, and the proportion of patients contributing to a net negative margin increased.

Of 821 patients analyzed, 33.7% contributed to an overall negative margin under a fee-for-service payment model. Under the bundled payment model, 41.7% of patients contributed to a net negative margin.

Results demonstrate that current payment models may allow for a significant mismatch in financial incentive, quality of surgical care, and willingness of hospitals to take on high-risk patients in a bundled payment system, the authors say.

Importance The Bundled Payments for Care Improvement Initiative was proposed by the Centers for Medicare and Medicaid Services to obtain and reward a greater value of care. Still in its infancy, little is known regarding the potential effects of the Bundled Payments for Care Improvement Initiative on hospital payments and net margins.